WPA and WPA2 encryption standards can sometimes be confusing.
WPA uses TKIP encryption, WPA2 uses AES, but can also use TKIP for backward-compatability (so it would accept WPA connections).
In essence:
WPA = WPA with TKIP = PSK
WPA2 = WPA with AES = PSK2
When you set your router to use WPA2, you usually have the option to use AES, or TKIP+AES. When your router is set to "WPA2 with TKIP+AES" it means that network devices that can use WPA2 will connect with WPA2, and network devices that can only use WPA will connect with WPA. The passphrase for both WPA and WPA2 will be the same. This option allows users to easily transition from WPA to WPA2. To set your router to use only WPA2, choose WPA2 with AES (do not use TKIP).
This mixed WPA2 TKIP+AES mode is sometimes called PSK2-mixed mode.
Note that many 802.11n devices will slow down to 54Mbps if you use older encryptions, such as WEP and WPA/TKIP security to be compliant with the specs.
See also:
WPA Personal vs. Enterprise ?Wireless Network Speed Tweaks
